Kajaria Ceramics Ltd. share price target

Led by cost optimization measures and improved utilisation, Kajaria Ceramics (KJC) has reported a decent operating performance in 2QFY19, beating our estimates albeit marginally. Reported EBITDA stood at Rs1.08bn (-11% YoY and +13% QoQ) vs. our estimate of Rs1.02bn, while EBITDA margin came in at 15% (-316bps YoY and +28bps QoQ). Average realisation improved by 1.3% QoQ to Rs349/sm, broadly in-line with our estimate. Operating cost/sm stood at Rs315/sm (+1.6% YoY and +0.9% QoQ). Revenue grew by 8% YoY and 10% QoQ to Rs7.25bn mainly led by 10.5% YoY growth in volume to 19.54msm. Whilst the Management expected JVs business to revive in current fiscal, persistent loss from the JVs does not bode well for KJC, in our view. Strong...

Kajaria Ceramics Ltd (KCL) reported disappointing numbers for Q1FY19, below our estimates on all parameters. Its consolidated revenue grew by 4.6% YoY. While volume growth stood healthy at 8.7% YoY, poor realizations in the Tiles segment impacted the overall revenue growth. Besides pricing pressure, high power & fuel cost resulted in 187bps YoY contraction in EBITDA margins.

Kajaria Ceramics reported topline of ` 6.5 bn (+4.6% YoY, -12.4% QoQ), 4.5% higher than D'est. Tile segment reported topline growth of 2.1% YoY on the back of 8.7% YoY growth in Volumes (-11.5% QoQ), Volume growth of 8.7% YoY during the quarter driven by 20.8% YoY growth in own manufacturing sales. Blended realisation for the tile division declined to `345/MSM (-6.1% YoY, -0.5% QoQ).Sanitaryware/Faucets division reported 68.7% YoY growth (-19.2% QoQ). Capacity addition by Morbi...

Sector: Construction Material /Mid-Cap | Earnings Update 1QFY19 Background: Kajaria Ceramics the largest tile manufacturer in India, with a 68.37msm annual capacity (29.47MSM Ceramic tiles, 22.4MSM PVT and 16.5MSM GVT) spread across eight plants; four plants in Morbi, Gujarat with cumulative capacity of 19.57 MSM, one each in Sikandrabad - UP (8.4MSM), Vijayawada - AP (2.9 MSM), Malutana Rajasthan (6.5 MSM) and Gailpur - Rajasthan (31 MSM). Kajaria has a strong distribution network of 1,400 dealers, 5,000 sales points across the country and 34 display centers are located at all the Kajaria's offices. Kajaria is the only tile manufacturer in India to be awarded Superbrand' status which they have retained for the...

Kajaraia Ceramics continued to report dismal set of numbers in 1QFY19 led by sustained soft realisation and higher fuel cost. While consolidated revenue grew by 5% YoY mainly due to 9% YoY volume growth and robust growth in Sanitary ware & Faucets revenues (+69% YoY), EBITDA dropped by ~7% YoY to Rs968mn. EBITDA margins declined to 14.7% (-188bps YoY and -128bps QoQ) despite 73bps YoY improvement in gross margin to 65.4%. Notably, Power & Fuel cost as percentage of sales surged by 328bps YoY to 23.4% led by higher gas prices. Average blended realisation declined by 6% YoY and 0.5% QoQ to Rs344/sm. Contrary to Kajaria's guidance of Rs200mn PAT from JVs in FY19E, 1QFY19 numbers do not reflect any improvement from JV...

The topline grew 4.7% YoY to | 657.0 crore (our expectation of | 646.6 crore) mainly on account of better volume growth The EBITDA margin contracted 180 bps YoY to 14.7% (our...

Kajaria Ceramics Ltds (KCL) Q4FY18 consolidated revenue growth of 4.1% YoY was more or less in line with our estimates, however, the company disappointed on the profit front. EBITDA de-grew by 8.2% with a 214bps YoY contraction in EBITDA margins.

In the last one & half year Ceramic Industry faced multiple challenges, Demonetization and GST Implementation restricted volume growth. Collective might of the Un-organized players exerted volume/pricing pressure across product range (attributed to Vibrant Ceramic expo hosted by Morbi based players in Nov'2017 & Capacity addition in GVT segment by Morbi based players). We believe volume/pricing pressure will ease for the organized players as our channel checks and management commentary suggests Morbi association is unlikely to host next edition of Vibrant...

Kajaria Ceramics reported revenue growth of 4% YoY (+13% QoQ) to Rs7.5bn mainly led by 4.8% YoY volume growth at 20.2 msm. Blended realisation declined by 2.1% YoY and 2.9% QoQ mainly due to fall in GVT realisations. Notably, increase in gas prices, lower GVT realisations and loss from select JVs resulted in EBITDA de-growth of 8% YoY (+9% QoQ) to Rs1.2bn and EBITDA margin dipped by 214 bps YoY and 62 bps QoQ to 16%. However, problems of inefficient JVs have been resolved in the quarter and JV business is expected to see a decent traction hereon. Further, a consistent reduction in interest outgo due to debt pare down (Rs1.7bn debt in 4QFY18 v/s Rs2.1bn in 4QFY17) could aid profits further. Net profit stood at Rs696mn (-3.5%...

The topline grew 4.2% YoY to | 750.0 crore (our expectation: | 735.3 crore) mainly on account of volume growth EBITDA margin contracted 200 bps YoY to 16.0% (our estimate 16.6%) due to higher fuel costs (20.3% in Q4FY18 vs. 18.1% in Q4FY17) The bottomline declined 6.7% YoY to | 66.0 crore (our expectation: | 66.4 crore) mainly on account of EBITDA margin contraction The board has recommended a dividend of | 3 per share for FY18 Posts volume growth of 4.8% in Q4FY18...